Alphabet, Meta and Microsoft continue to battle in the AI race, with the 3 announcing Q1 earnings this week.
Meta
- On April 24th, Meta announced their revenues had increased by 27% YoY to over $36bn.
- They claimed that their revenue expectations for Q2 are $36.5-39bn.
- They announced that they would be spending more on AI development in the future, following their recent success.
- Their apps are seeing strong usage.
- “More than 3.2 billion people use at least one of our apps each day” Zuckerberg stated during the conference call.
- This is further helped by ‘TikTok’s potential ban.
- Despite these strong figures, Meta stock fell more than 15% in after-hours trading.
- Investors were not happy about Meta’s planned increase on AI.
- They stated to want to spend up to $40bn on AI development, up from their previous $30-37bn.
- Zuckerberg even claimed that their investment on AI may take some time to increase revenues.
- Additionally, with more countries introducing AI regulations alongside upcoming elections, the future of AI seems uncertain.
The problems lie in whether Meta can keep up in the AI race without sacrificing their financials
Alphabet
- Alphabet (Google’s parent company) had much better news on Thursday.
- Revenue rose 15% to $80.5bn YoY.
- Expectations were around $79bn.
- They also announced their first ever dividend.
- Their operating margin also expanded from 25% to 32%.
- Expectations were at 29%.
- Their stock rose by 10% on Friday and reached a valuation of $2 trillion.
- There are only 3 others at this level including Microsoft, Apple and Nvidia
- On May 14th and 15th Google will share more information on its plan for AI at their developer conference
Microsoft
- Microsoft’s recent heavy bet into AI has paid off strongly.
- Total revenue rose by 17% to $61.86bn YoY.
- Expectations were around $60bn.
- Their cloud computing revenue rose by 20%.
- Increased success of ‘Chat GPT’ has contributed to this.
- Microsoft invested $13bn into OpenAI, the parent of ChatGPT.
- Their share price rose by 3% on Friday following the announcement.